NIPU 2026: Cabinet Nod for New Gas-Based Urea Plants
Why in the news
The Cabinet cleared a new investment framework for urea, meant to cut import reliance and steady fertilizer supply.
Why needed
| Measure | Quantity |
|---|---|
| Annual use | About 40 MT |
| Home output | About 30 MT |
| Imports | Nearly 10 MT (25%) |
- West Asia conflict and Strait of Hormuz disruption lifted urea prices 40-50%.
Key features
- Plants: 8-9 gas-based units.
- Costs: fixed and variable shown separately.
- Returns: RoE band of 12-16%.
- Forex: fixed costs in rupees after four years.
Significance
- Lowers import dependence, helps food security and domestic manufacturing.
Soil health concern
- Recommended N:P:K is 4:2:1, but India’s current ratio is 9.8:3:1.
Exam angle
- Approved by the Union Cabinet.
- RoE band 12-16%.